April 05, 2017 | Grain Hedge Insights | Kevin McNew | Views: 230

Soybeans Find Strength in the Overnight

In Corn, Trade Moved Lower Yesterday

Soybeans found strength overnight as flooding concerns mount in Argentina. Corn and wheat were along for the ride but gains were more tempered in outside markets, crude oil had strong gains, as it tries to get back to the $52 mark for the first time in nearly a month.

 

Rains over the last week have raised concerns about the Argentine soybean crop as harvest gets underway. Last week, rain totals reached as much as 6 inches in some areas with a bit more hitting over the weekend. Moderate to heavy rain is expected for a majority of Argentina’s production region Friday into Sunday, with some flooding possible. However, Apr 11 is expected to bring a dry down period allowing time for harvest and flood waters to recede.

 

Ukraine is expected to harvest 24.2 MMT of wheat in 2017, analyst UkrAgroConsult said on Wednesday, raising its forecast from 23.5 MMT. The wheat crop could reach 25-26 million tonnes if there are favourable weather conditions.  However, that would still be below last year’s output of 26.8.

 

In corn, the trade moved lower yesterday with heavy farmer sales and a drop in export values. The first line of resistance on front-month May should be 371 ¾, the high from Monday’s trade; down support is from last week’s crop report in the 358-360 area.

In oil, API stocks data yesterday showed a drawdown of 1.83 million barrels on the week, versus a trade estimate of only a 0.3 million barrel drop (expected). Official government EIA data today with a modest 0.2 million barrel drop expected by the trade.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

April 04, 2017 | Kevin McNew | Views: 417
April 04, 2017 | Grain Hedge Insights | Kevin McNew | Views: 203

Soybeans Trying to Recover in the Overnight Session

US Dollar and Crude Oil had Modest Gains

Grains posted modest gains overnight with soybeans trying to recover from a 10-week slide during which it has lost $1.40 a bushel. In outside markets, equity futures were sliding into the open while the US dollar and crude oil had modest gains.

 

Winter wheat crop conditions generally improved over the last week thanks to showers passing through the Plains. On Monday, USDA reported the Kansas wheat crop at 43% good-to-excellent vs 38% last week, Oklahoma at 41% vs 37% and TX improved from 34% last week to 39% this week. On average across all states, crop conditions are running off of last year’s reading with 51% of the winter wheat crop rated good-to-excellent vs 59% last year.

 

USDA’s census soy crush estimate released after the close yesterday showed February’s monthly total of 150.98 MB, slightly below analyst estimates which had pegged the figure at 151.9 MB. Brazil soy exports in March were a record high of 9.7 MMT.

In overnight news, South Korea feed group NOFI bought 65,000 MT of feed wheat, thought to be sourced from the Black Sea region. Japan is tendering for 120,000 MT of food wheat in their normal 3-times a month deal between the US, Canada and Australia. Algeria also was tendering for 50,000 MT of wheat, but often buys considerably more in its tenders than the nominal volume sought.

 

Argentina continues to be wet which is hampering soy harvest. A Big system is expected to bring widespread rains this weekend. Area of heavy rain will lead to some flooding potential.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

April 03, 2017 | Grain Hedge Insights | Kevin McNew | Views: 265

Modest Buying in the Overnight Session for Grains

Friday's USDA Report Confirmed Increase in Soybeans

Modest Buying in the Overnight Session for Grains

The week started with grains finding modest buying in the overnight session. Outside markets were also relatively muted going into the Morning trade session.

Friday’s USDA report confirmed a 6 million acre increase in soybean plantings as well as a 4 million acre drop in corn and wheat plantings.  Meanwhile, quarterly stocks for all three grains came in higher than expected with corn being of importance as a measure of feed use. The higher than trade expected stocks number implies USDA’s 8% increase in corn feed use will likely need to be ratcheted lower.

Argentina harvest was slowed over the weekend on heavy rains and more unwanted rains will return next weekend, keeping harvest limited. Brazil has had dry weather of late to help speed along soy harvest, but rains are likely in the 6-10 day forecast which should benefit the 2nd season corn crop.

In international deals, Iraq got little interest in their “installment plan” in paying for wheat purchases, so they pulled a tender on 50,000 MT. A South Korea feed group bought 125,000 MT of feed wheat from optional origin sources.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

March 31, 2017 | Kevin McNew | Views: 581
March 31, 2017 | Grain Hedge Insights | Kevin McNew | Views: 234

Weekly Cash Comments

Weekly Cash Commentary for week ending 03/31/2017

Weekly Cash Comments

Grain basis inched higher this week for both corn and soybeans with 1-cent advances on average across US buyers.

 

The backdrop of weakness in futures and looming uncertainty around the end-of-week USDA report kept most people holding tight. Farmers still seem to hold a lot of cash corn and a high percentage of it unpriced. In corn, ethanol plants had bit of upside this week gaining 1.7 cents on average across 142 plants. The Western Cornbelt has seen some decent gains in spot basis over the past few weeks. ADM Columbus has boosted its basis by 15 cents a bushel in the past two weeks and a limited number of other buyers in the WCB seem to be showing a similar appetite to attract more grain.

 

For soy crush plants, average basis across 47 plants was up 1.6 cents a bushel, slightly better than the US average change. A few plants in the ECB did boost basis by a dime, but the vast majority were flat and continue to have weak basis as compared to historical norms for this time of year.

 

River terminals for both corn and soybeans posted average gains of 1 cent on the week. However, considering a decline in Gulf basis of 5 and 3 cents for corn and soybean basis, respectively, it was fairly remarkable that interior basis was able to hold up along river markets.

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

March 31, 2017 | Grain Hedge Insights | Kevin McNew | Views: 355

Today’s Crop Report will Provide the First Guidance on 2017 Supplies

Grains showing modest gains going into today's crop report

Grains were showing modest gains going into today’s big crop report.

 

Yesterday after the close, Brazilian analyst Agroconsult pegged the soy crop there at 113 MMT versus a previous forecast of 111 MMT and well above USDA which was at 108 MMT. Their latest forecast was based on a crop tour which suggested record yields in many growing regions. For corn, they kept their forecast at 95 MMT also above USDA at 91.5 MMT.

 

Rains continue to look plentiful for the Southern Plains, benefitting the HRW crop. Heading into April, weather forecasts point to plentiful rains in the Midwest, with some cold temps possible in the 2nd week of the month. The most likely scenario seems to point to high rainfall throughout most of the region, with the main risk being excessive wetness that could slow the planting pace.

Today’s crop report will provide the first guidance on 2017 supplies as USDA releases its farmer-based survey on planting intentions. Traders expect 3 million fewer acres of corn, 5 million more acres of soybeans and 4 million less acres of wheat. Corn stocks will also be closely followed for indications on feed use for Q2.

 

Watch Thursday’s GrainTV for our perspective on the report

[link to GTV]

 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

March 31, 2017 | Grain Hedge Insights | | Views: 322
March 30, 2017 | Kevin McNew | Views: 262
March 30, 2017 | Grain Hedge Insights | Kevin McNew | Views: 272

Grain Prices Continue their Stalemate

Weekly Export Sales Reported this Morning were Strong for Wheat

One day to go until USDA’s crop reports that are expected to breath new life in the markets. In the meantime, grain prices continue to be in a stalemate with a modest downward bias.

 

USDA reported the sale of 165,000 MT of soybeans to China

 

Overnight China’s corn futures fell for a 2nd day in a row fueled by talk that the state may release grain from its huge stockpiles earlier than planned and at a lower price.

 

Weekend rains in Argentina are expected to slow the corn and soy harvest there with some flooding in the Western areas. Lighter rains are expected there next week, but widespread issues to disrupt the harvest or cause yield losses are not expected. Brazil continues to see a dry spell helping move along soy harvest and timely rains are expected mid next week to aid the 2nd season safrinha crop.

Looking ahead to Friday’s Quarterly Stocks report, all eyes will be on corn stocks which are pegged to be 8.53 billion bushels with a wide range of estimates from 8.2-8.9. Implied corn feed use from this report will be widely watched and based on expectations for stocks, this would put feed use for Quarter 2 at 8% over the previous year’s mark. That would be a sharp jump from Q1 which was up 3.6% for the year. Keep in mind USDA has penciled in an 8.4% increase in feed use for the entire marketing year, so the bar is set high for the remainder of the year.

 

Weekly export sales reported by USDA this morning were strong for wheat and soybeans, but disappointing for corn.

 

Export Sales-

 

Actual

Estimated

Wheat - OC

464

250-450

Wheat - NC

164

50-200

Corn - OC

717

900-1,200

Corn - NC

125

100-300

Soybeans-OC

681

350-550

Soybeans-NC

316

100-300


 

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

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